Indicate by check mark if
the registrant is a well-known seasoned issuer, as defined in Rule 405 of the
Securities Act. Yes [ ] No [X]

Indicate by check mark if
the registrant is not required to file reports pursuant to Section 13 or 15(d)
of the Act. Yes [ ] No [X]

Indicate by check mark
whether the registrant (1) has filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.

Yes [X] No [ ]

Indicate by check mark
whether the registrant has submitted electronically and posted on its corporate
Web site, if any, every Interactive Data File required to be submitted and
posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files). [ ] Yes [ ] No

Indicate by check mark if
disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not
contained herein, and will not be contained, to the best of the
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or
a smaller reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.

Large accelerated
filer £

Accelerated filer
£

Non-accelerated filer
£(Do not check if a smaller reporting
company)

Smaller reporting
company S

Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Act). Yes [ ] No
[X]

State the aggregate market
value of the voting and non-voting partnership interests held by non-affiliates
computed by reference to the price at which the partnership interests were last
sold, or the average bid and asked price of such partnership interests as of the
last business day of the registrants most recently completed second fiscal
quarter. No market exists for the limited partnership interests of the
Registrant, and, therefore, no aggregate market value can be
determined.

DOCUMENTS INCORPORATED BY
REFERENCE

None

FORWARD-LOOKING
STATEMENTS

The Private
Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements in certain circumstances. Certain information
included in this Annual Report contains or may contain information that is
forward-looking within the meaning of the federal securities laws, including,
without limitation, statements regarding the effect of redevelopments, the
Partnerships future financial performance, including the Partnerships ability
to maintain current or meet projected occupancy and rent levels, and the effect
of government regulations. Actual results may differ materially from those
described in these forward-looking statements and, in
addition, will be affected by a variety of risks and factors some of which are
beyond the Partnerships control including, without limitation: financing risks,
including the availability and cost of financing and the risk that the
Partnerships cash flows from operations may be insufficient to meet required
payments of principal and interest; natural disasters and severe weather such as
hurricanes; national and local economic conditions; the general level of
interest rates; energy costs; the terms of governmental regulations that affect
the Partnerships property and interpretations of those regulations; the
competitive environment in which the Partnership operates; real estate risks,
including fluctuations in real estate values and the general
economic climate in local markets and competition for residents in such markets; insurance risk,
including the cost of insurance; development risks;
litigation, including costs associated with prosecuting or defending claims and
any adverse outcomes; and possible environmental liabilities, including costs,
fines or penalties that may be incurred due to necessary remediation of
contamination of properties presently owned or previously owned by the
Partnership. Readers should carefully review the Partnerships consolidated
financial statements and the notes thereto, as well as the other documents the
Partnership files from time to time with the Securities and Exchange
Commission.

PART I

Item
1. Business.

Consolidated Capital
Properties III (the "Partnership" or "Registrant") was organized on May 22, 1980
as a limited partnership under the California Uniform Limited Partnership
Act. Commencing November 25, 1980, the Partnership offered, pursuant to a
Registration Statement filed with the Securities and Exchange Commission,
120,000 units of limited partnership interest (the "Units"), with the general
partner's right to increase the offering to 240,000 Units. The Units
represent equity interests in the Partnership and entitle the holders thereof to
participate in certain allocations and distributions of the Partnership.
The sale of Limited Partnership Units closed on December 17, 1981, with 158,945
Units sold at $500 each, or gross proceeds of $79,473,000 to the
Partnership. The original general partners contributed capital in the
amount of $1,000 for a 4% interest in the Partnership. At the request of
certain Limited Partners and in accordance with its Partnership Agreement
(herein so called), the Partnership has retired a total of 373 Units. The
Partnership gave no consideration for these Units. The Partnership
Agreement provides that the Partnership is to terminate on December 31, 2010
unless terminated prior to such date. The Partnership Agreement also provides
that the term of the Partnership cannot be extended beyond the termination date.
The General Partner (as defined below) began marketing the Partnerships
remaining investment property for sale in 2010.

By the end of fiscal year
1985, approximately 71% of the proceeds raised had been invested in twenty-eight
properties. Of the remaining 29%, 11% was required for organizational and
offering expenses, sales commissions and acquisition fees, and 18% was retained
in Partnership reserves for project improvements and working capital as required
by the Partnership Agreement. Since its initial offering, the Partnership has not received, nor are limited partners
required to make, additional capital contributions.

Upon the Partnership's formation in 1980,
Consolidated Capital Equities Corporation ("CCEC"), a Colorado corporation, was
the corporate general partner. In 1988, through a series of transactions,
Southmark Corporation ("Southmark") acquired controlling interest in CCEC.
In December 1988, CCEC filed for reorganization under Chapter 11 of the United
States Bankruptcy Code. In 1990, as part of CCEC's reorganization plan,
Concap Equities, Inc. ("CEI" or the "General Partner") acquired CCEC's general
partner interests in the Partnership and in 15 other affiliated public limited
partnerships (the "Affiliated Partnerships") and CEI replaced CCEC as managing
general partner in all 16 partnerships. The selection of CEI as the sole
managing general partner was approved by a majority of the Limited Partners in
the Partnership and in each of the Affiliated Partnerships pursuant to a
solicitation of the Limited Partners dated August 10, 1990. As part of
this solicitation, the Limited Partners also approved an amendment to the
Partnership Agreement to limit changes of control of the Partnership. CEI
is a subsidiary of Apartment Investment and Management Company ("AIMCO"), a
publicly traded real estate investment trust.

The Partnership is engaged
in the business of operating and holding real estate properties for investment.
At December 31, 2009, the Partnership owned one apartment complex. Prior to
2008, the Partnership disposed of twenty-nine properties, two of which were
reacquired through foreclosure. See "Item 2. Property" below for a
description of the Partnership's remaining property.

The Partnership has no
employees. Management and administrative services are provided by the
General Partner and by agents retained by the General Partner. An
affiliate of the General Partner has been providing such property management
services.

A further description of the
Partnership's business is included in "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations" included in this Form
10-K.

Item
2. Property.

The following table sets forth the
Partnership's investment in property:

Date of

Property

Purchase

Type of
Ownership

Use

Village Green
Apartments

12/20/91

Fee ownership subject
to

Apartment

Altamonte
Springs, Florida

first and second

164
units

mortgages
(1)

(1) Property is held by a limited
partnership in which the Partnership owns a 99% interest.

Schedule of
Property

Set forth below for the
Partnership's property is the gross carrying value, accumulated depreciation,
depreciable life, method of depreciation and Federal tax basis.

Gross

Carrying

Accumulated

Depreciable

Method
of

Federal

Property

Value

Depreciation

Life

Depreciation

Tax
Basis

(in
thousands)

(in
thousands)

Village
Green

Apartments

$
6,063

$
4,210

3-30 yrs

S/L

$
3,591

See "Note A  Organization
and Summary of Significant Accounting Policies" to the consolidated financial
statements included in "Item 8. Financial Statements and Supplementary Data" for
a description of the Partnership's capitalization and depreciation
policies.

Schedule of Property
Indebtedness

The following table sets
forth certain information relating to the loans encumbering the Partnership's
property.

Principal

Principal

Balance
At

Balance

December
31,

Interest

Period

Maturity

Due
At

Property

2009

Rate
(1)

Amortized

Date

Maturity
(2)

(in
thousands)

(in
thousands)

Village
Green

Apartments

1st
mortgage

$2,918

7.54%

30
yrs

08/21

$2,343

2nd
mortgage

3,592

5.93%

30
yrs

08/19

2,934

$6,510

$5,277

(1) Fixed rate
mortgages.

(2) See "Note C  Mortgage Notes Payable" to the
consolidated financial statements included in "Item 8. Financial Statements and
Supplementary Data" for information with respect to the Partnership's ability to
prepay the fixed rate loans and other specific details about the
loans.

Schedule of Rental Rates and
Occupancy

Average annual rental rates
and occupancy for 2009 and 2008 for the property are as follows:

Average
Annual

Average
Annual

Rental
Rates

Occupancy

(per
unit)

Property

2009

2008

2009

2008

Village Green
Apartments

$
8,315

$
8,849

94%

95%

The real estate
industry is highly competitive. The Partnerships property is subject to
competition from other residential apartment complexes in the area. The
General Partner believes that the Partnership's property is adequately
insured. The property is an apartment complex which leases units for terms
of one year or less. No residential tenant leases 10% or more of the
available rental space. The property is in good physical condition,
subject to normal depreciation and deterioration as is typical for assets of
this type and age.

Schedule of Real Estate
Taxes and Rate

Real estate taxes and rate
in 2009 for the property were as follows:

2009

2009

Billing

Rate

(in
thousands)

Village Green
Apartments

$ 83

1.74%

Capital
Improvements

During the year ended December 31, 2009,
the Partnership completed
approximately $289,000 of capital improvements at Village Green Apartments,
consisting primarily of parking area improvements, air conditioning and kitchen
and bath upgrades, appliance and floor covering replacements and construction
related to the casualties discussed in Item 7. Managements Discussion and
Analysis of Financial Condition and Results of Operations. These improvements
were funded from operations, insurance proceeds and advances from AIMCO
Properties, L.P., although AIMCO Properties, L.P. is not obligated to fund such
advances. The Partnership regularly evaluates the capital improvement needs of
the property. While the Partnership has no material commitments for
property improvements and replacements, certain routine capital expenditures are
anticipated during 2010. Such capital expenditures will depend on the
physical condition of the property as well as anticipated cash flow generated by
the property.

Capital expenditures will be
incurred only if cash is available from operations, Partnership reserves, or
advances from AIMCO Properties, L.P., although AIMCO Properties, L.P. is not
obligated to fund such advances. To the extent that capital improvements are
completed, the Partnerships distributable cash flow, if any, may be adversely
affected at least in the short term.

Item
3. Legal Proceedings.

As previously disclosed,
AIMCO Properties, L.P. and NHP Management Company, both affiliates of the
General Partner, were defendants in a lawsuit, filed as a collective action in
August 2003 in the United States District Court for the District of Columbia,
alleging that they willfully violated the Fair Labor Standards Act (FLSA) by
failing to pay maintenance workers overtime for time worked in excess of 40
hours per week (overtime claims). The plaintiffs also contended that
AIMCO Properties, L.P. and NHP Management Company (the Defendants) failed to
compensate maintenance workers for time that they were required to be "on-call"
(on-call claims). In March 2007, the court in the District of Columbia
decertified the collective action. In July 2007, plaintiffs counsel filed
individual cases in Federal court in 22 jurisdictions. In the second
quarter of 2008, AIMCO Properties, L.P. settled the overtime cases involving 652
plaintiffs and established a framework for resolving the 88 remaining on-call
claims and the attorneys fees claimed by plaintiffs counsel. As a
result, the lawsuits asserted in the 22 Federal courts have been dismissed.
During the fourth quarter of 2008, the settlement amounts for alleged
unpaid overtime to employees were paid by those partnerships where the
respective employees had worked. The Partnership was not required to pay any settlement amounts. At this time,
the 88 remaining on-call claims and the attorneys fees claimed by plaintiffs
counsel are not resolved. The parties have selected six on-call claims that
will proceed forward through the arbitration process and have selected
arbitrators. After those arbitrations have been completed, the parties will
revisit settling the on-call claims. The first two arbitrations took place in
December 2009 and the Defendants received a defense verdict against the first
two claimants and plaintiffs dismissed the claims of the next two claimants. The
remaining two arbitrations will take place in April 2010. The General Partner is
uncertain as to the amount of any loss that may be allocable to the
Partnership. Therefore, the Partnership cannot estimate whether any loss
will occur or a potential range of loss.

PART
II

The Partnership, a
publicly-held limited partnership, sold 158,945 Limited Partnership Units (the
Units) aggregating $79,473,000. In addition, the General Partner
contributed a total of $1,000 to the Partnership. The Partnership currently has
4,145 holders of record owning an aggregate of 158,566 Units. Affiliates
of the General Partner owned 88,477.50 Units or 55.80% at December 31,
2009.

There were no distributions made to the
partners during the years ended December 31, 2009 and 2008. Future cash
distributions will depend on the levels of net cash generated from operations,
the timing of the debt maturities, property sale and/or refinancings. The
Partnerships cash available for distribution is reviewed on a monthly basis. In
light of the amounts accrued and payable to AIMCO Properties, L.P. at December
31, 2009, there can be no assurance that the Partnership will generate
sufficient funds from operations after capital expenditures to permit any
distributions to its partners in 2010 or subsequent periods. See Item 2.
Property  Capital Improvements for information relating to anticipated capital
expenditures at the property.

In addition to its indirect ownership of the
general partner interests in the Partnership, AIMCO and its affiliates owned
88,477.50 Units in the Partnership representing 55.80% of the outstanding Units
at December 31, 2009. A number of these Units were acquired pursuant to tender
offers made by AIMCO or its affiliates. It is possible that AIMCO or its
affiliates will acquire additional Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private purchases or tender offers. Pursuant to the Partnership
Agreement, unitholders holding a majority of the Units are entitled to take
action with respect to a variety of matters that include, but are not limited
to, voting on certain amendments to the Partnership Agreement and voting to
remove the General Partner. As a result of its ownership of 55.80% of the
outstanding Units, AIMCO and its affiliates are in a position to control all
voting decisions with respect to the Partnership. Although the General Partner
owes fiduciary duties to the limited partners of the Partnership, the General
Partner also owes fiduciary duties to AIMCO as its sole stockholder. As a
result, the duties of the General Partner, as general partner, to the
Partnership and its limited partners may come into conflict with the duties of
the General Partner to AIMCO as its sole stockholder.

Item
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.

This item should be read in
conjunction with the consolidated financial statements and other items contained
elsewhere in this report.

The Partnerships financial results depend
upon a number of factors including the ability to attract and maintain tenants
at the investment property, interest rates on mortgage loans, costs incurred to
operate the investment property, general economic conditions and weather. As
part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment of its investment property to assess the
feasibility of increasing rents, maintaining or increasing occupancy levels and
protecting the Partnership from increases in expenses. As part of this plan, the
General Partner attempts to protect the Partnership from the burden of
inflation-related increases in expenses by increasing rents and maintaining a
high overall occupancy level. However, the General Partner may use rental
concessions and rental rate reductions to offset softening market conditions;
accordingly, there is no guarantee that the General Partner will be able to
sustain such a plan. Further, a number of factors that are outside the control of the Partnership, such as the local
economic climate and weather,
can adversely or positively affect the Partnerships financial
results.

Results of
Operations

The Partnerships net loss
for the year ended December 31, 2009 was approximately $486,000, compared to a
net loss of approximately $514,000 for the year ended December 31, 2008. The
decrease in net loss for the year ended December 31, 2009 is due to a decrease
in total expenses and the recognition of a casualty gain during 2009, partially
offset by a decrease in total revenues.

The decrease in total
expenses is due to decreases in operating, general and administrative and
property tax expenses, partially offset by increases in depreciation and
interest expenses. The decrease in operating expenses is due to decreases in
advertising expense, routine repair and maintenance expense, contract services
and insurance expense as a result of decreased hazard insurance premiums.
Operating expenses also decreased due to clean up costs incurred in 2008 for
damages from Tropical Storm Fay (as discussed below). The decrease in property
tax expense is due to a decrease in the assessed value of the property. The
increase in depreciation expense is due to property improvements and
replacements placed into service at the Partnerships investment property during
the past twelve months. The increase in interest expense is due to an increase
in interest on advances from affiliates due to a higher advance balance, the
payment of interest incurred in connection with the escheatment of unclaimed
distributions during 2009 and additional loan cost amortization in 2009.

General and administrative
expenses decreased primarily due to a decrease in management reimbursements
charged by the General Partner as allowed under the Partnership Agreement. Also
included in general and administrative expenses for the years ended December 31,
2009 and 2008 are costs associated with the quarterly and annual communications
with investors and regulatory agencies and the annual audit required by the
Partnership Agreement.

The decrease in total
revenues is primarily due to a decrease in rental income. Other income remained
relatively constant for the comparable periods. The decrease in rental income is
primarily due to a slight decrease in occupancy and a decrease in the average
rental rate at Village Green Apartments, partially offset by a decrease in bad
debt expense.

In July 2008,
Village Green Apartments sustained damages of approximately $22,000 to a
concrete wall. No apartment units were damaged. During the year ended
December 31, 2009, the Partnership recognized a casualty gain of approximately
$12,000 as a result of the receipt of insurance proceeds of approximately
$12,000. The damaged assets were fully depreciated.

In August 2008, Village
Green Apartments sustained damages from Tropical Storm Fay of approximately
$109,000, including estimated clean up costs of approximately $30,000, which
were included in operating expenses during the year ended December 31, 2008.
These costs were not covered by insurance proceeds. The Partnership did not
recognize a loss as the damaged assets were fully depreciated.

During May 2009, Village
Green Apartments sustained damages of approximately $29,000 from a storm. No
apartment units were damaged. During the year ended December 31, 2009, the
Partnership recognized a casualty gain of approximately $6,000 as a result of
the receipt of insurance proceeds of approximately $6,000. The damaged
assets were fully depreciated.

Liquidity and Capital
Resources

At December 31, 2009, the
Partnership had cash and cash equivalents of approximately $52,000, compared to
approximately $29,000 at December 31, 2008. The increase in cash and cash
equivalents of approximately $23,000 from December 31, 2008 is due to
approximately $290,000 and $45,000 of cash provided by financing and operating
activities, respectively, partially offset by approximately $312,000 of cash
used in investing activities. Cash provided by financing activities consisted of
advances received from an affiliate of the General Partner, partially offset by
payments of principal made on the mortgages encumbering Village Green
Apartments. Cash used in investing activities consisted of property improvements
and replacements, partially offset by insurance proceeds received.

During the years ended
December 31, 2009 and 2008, AIMCO Properties, L.P., an affiliate of the General
Partner, advanced the Partnership approximately $370,000 and $624,000,
respectively, to fund operations, property taxes and capital expenditures at
Village Green Apartments. AIMCO Properties, L.P. charges interest on
advances under the terms permitted by the Partnership Agreement. The outstanding
advances made to the Partnership accrue interest at a variable rate based on the
prime rate plus a market rate adjustment for similar type loans. Affiliates of
the General Partner review the market rate adjustment quarterly. The interest
rates on outstanding advances at December 31, 2009 ranged from 5.77% to 12.81%.
Interest expense on advances was approximately $99,000 and $22,000 for the years
ended December 31, 2009 and 2008, respectively. At December 31, 2009 and 2008,
the total amount of outstanding advances and associated accrued interest owed to
AIMCO Properties, L.P. was approximately $1,115,000 and $646,000, respectively,
and is included in due to affiliates on the consolidated balance
sheets included in Item 8. Financial Statements and Supplementary Data. The
Partnership may receive additional advances of funds from AIMCO Properties, L.P.
although AIMCO Properties, L.P. is not obligated to provide such advances. For
more information on AIMCO Properties, L.P., including copies of its audited
balance sheet, please see its reports filed with the Securities and Exchange
Commission.

The sufficiency of existing
liquid assets to meet future liquidity and capital expenditure requirements is
directly related to the level of capital expenditures required at the investment
property to adequately maintain the physical assets and other operating needs of
the Partnership and to comply with Federal, state, and local legal and
regulatory requirements. The General Partner monitors developments in the
area of legal and regulatory compliance. The Partnership regularly evaluates the
capital improvement needs of the property. While the Partnership has no material
commitments for property improvements and replacements, certain routine capital
expenditures are anticipated during 2010. Such capital expenditures will depend
on the physical condition of the property as well as anticipated cash flow
generated by the property. Capital expenditures will be incurred only if cash is
available from operations, Partnership reserves or advances from
affiliates. To the extent that capital improvements are completed, the
Partnership's distributable cash flow, if any, may be adversely affected at
least in the short term.

The Partnership's assets are
thought to be generally sufficient for any near-term needs (exclusive of capital
improvements and repayment of amounts due to affiliates) of the
Partnership. The first mortgage indebtedness encumbering the Partnerships
property of approximately $2,918,000 requires monthly payments of principal and
interest and a balloon payment of approximately $2,343,000 due at maturity in
2021. The second mortgage indebtedness encumbering the Partnerships property of
approximately $3,592,000 requires monthly payments of principal and interest and
a balloon payment of approximately $2,934,000 due at maturity in 2019. Since the
Partnerships term will expire on December 31, 2010 and the term cannot be
extended, the General Partner began marketing its investment property, Village
Green Apartments, again for sale in 2010. The Partnership has previously
marketed the property for sale as recently as 2009; however, the General Partner
was unsuccessful in its efforts to sell the property.
There can be no assurance that the General Partner will be successful in its
attempt to sell the property during 2010.

There were no distributions
made to the partners during the years ended December 31, 2009 and 2008. Future
cash distributions will depend on the levels of net cash generated from
operations and property sale. The Partnerships cash available for
distribution is reviewed on a monthly basis. In light of the amounts accrued and
payable to AIMCO Properties, L.P. at December 31, 2009, there can be no
assurance that the Partnership will generate sufficient funds from operations
after capital expenditures to permit any distributions to its partners in 2010
or subsequent periods.

Other

In addition to its indirect ownership of the
general partner interests in the Partnership, AIMCO and its affiliates owned
88,477.50 Units in the Partnership representing 55.80% of the outstanding Units
at December 31, 2009. A number of these Units were acquired pursuant to tender
offers made by AIMCO or its affiliates. It is possible that AIMCO or its
affiliates will acquire additional Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private purchases or tender offers. Pursuant to the Partnership
Agreement, unitholders holding a majority of the Units are entitled to take
action with respect to a variety of matters that include, but are not limited
to, voting on certain amendments to the Partnership Agreement and voting to
remove the General Partner. As a result of its ownership of 55.80% of the
outstanding Units, AIMCO and its affiliates are in a position to control all
voting decisions with respect to the Partnership. Although the General Partner
owes fiduciary duties to the limited partners of the Partnership, the General
Partner also owes fiduciary duties to AIMCO as its sole stockholder. As a
result, the duties of the General Partner, as general partner, to the
Partnership and its limited partners may come into conflict with the duties of
the General Partner to AIMCO as its sole stockholder.

Critical Accounting Policies
and Estimates

A summary of the Partnerships significant
accounting policies is included in "Note A  Organization and Summary of
Significant Accounting Policies" which is included in the consolidated financial
statements in "Item 8. Financial Statements and Supplementary Data". The
General Partner believes that the consistent application of these policies
enables the Partnership to provide readers of the consolidated financial
statements with useful and reliable information about the Partnerships
operating results and financial condition. The preparation of consolidated
financial statements in conformity with accounting principles generally accepted
in the United States requires the Partnership to make estimates and
assumptions. These estimates and assumptions affect the reported amounts
of assets and liabilities at the date of the financial statements as well as
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from these estimates. Judgments and
assessments of uncertainties are required in applying the Partnerships
accounting policies in many areas. The Partnership believes that of its
significant accounting policies, the following may involve a higher degree of
judgment and complexity.

Impairment of Long-Lived
Asset

Investment property is recorded at cost, less
accumulated depreciation, unless the carrying amount of the asset is not
recoverable. If events or circumstances indicate that the carrying amount of the
property may not be recoverable, the Partnership will make an assessment of its
recoverability by comparing the carrying amount to the Partnerships estimate of
the undiscounted future cash flows, excluding interest
charges, of the property. If the carrying amount exceeds the
estimated aggregate undiscounted future cash flows, the Partnership would
recognize an impairment loss to the extent the carrying amount exceeds the
estimated fair value of the property.

Real property investment is
subject to varying degrees of risk. Several factors may adversely affect
the economic performance and value of the Partnerships investment
property. These factors include, but are not limited to, general economic
climate; competition from other apartment communities and other housing options;
local conditions, such as loss of jobs or an increase in the supply of
apartments that might adversely affect apartment occupancy or rental rates;
changes in governmental regulations and the related cost of compliance;
increases in operating costs (including real estate taxes) due to inflation and
other factors, which may not be offset by increased rents; changes in tax laws
and housing laws, including the enactment of rent control laws or other laws
regulating multi-family housing; and changes in interest rates
and the availability of financing. Any adverse changes in
these and other factors could cause an impairment of the Partnerships
asset.

Revenue
Recognition

The Partnership generally
leases apartment units for twelve-month terms or less. The Partnership
will offer rental concessions during particularly slow months or in response to
heavy competition from other similar complexes in the area. Rental income
attributable to leases, net of any concessions, is recognized on a straight-line
basis over the term of the lease. The Partnership evaluates all accounts
receivable from residents and establishes an allowance, after the application of
security deposits, for accounts greater than 30 days past due on current tenants
and all receivables due from former tenants.

Item
8. Financial Statements and Supplementary
Data.

CONSOLIDATED CAPITAL
PROPERTIES III

LIST OF FINANCIAL
STATEMENTS

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets - December 31, 2009 and 2008

Consolidated
Statements of Operations - Years ended December 31, 2009 and 2008

Consolidated Statements of
Changes in Partners' Deficit - Years ended December 31, 2009 and 2008

Consolidated
Statements of Cash Flows - Years ended December 31, 2009 and 2008

Notes to Consolidated Financial Statements

Report of
Independent Registered Public Accounting Firm

The Partners

Consolidated Capital
Properties III

We have audited the
accompanying consolidated balance sheets of Consolidated Capital Properties III
as of December 31, 2009 and 2008, and the related consolidated statements of
operations, changes in partners' deficit, and cash flows for each of the two
years in the period ended December 31, 2009. These financial statements
are the responsibility of the Partnership's management. Our responsibility
is to express an opinion on these financial statements based on our
audits.

We conducted our audits in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. We were not engaged to perform an audit of the
Partnerships internal control over financial reporting. Our audits included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the
Partnerships internal control over financial reporting. Accordingly, we express
no such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the
financial statements referred to above present fairly, in all material respects,
the consolidated financial position of Consolidated Capital Properties III at
December 31, 2009 and 2008, and the consolidated results of its operations and
its cash flows for each of the two years in the period ended December 31, 2009,
in conformity with U.S. generally accepted accounting principles.

The accompanying financial
statements have been prepared assuming that the Partnership will continue as a
going concern. As more fully described in Note A to the financial statements,
the Partnership Agreement provides for the Partnership to terminate December 31,
2010. This raises substantial doubt about the Partnerships ability to
continue as a going concern. Managements plans in regard to these matters are
also described in Note A. The 2009 financial statements do not include any
adjustments to reflect the possible future effects on the recoverability and
classification of assets or the amounts and classification of liabilities that
may result from the outcome of this uncertainty.

/s/ERNST
& YOUNG LLP

Greenville, South Carolina

April 9,
2010

CONSOLIDATED CAPITAL
PROPERTIES III

CONSOLIDATED BALANCE
SHEETS

(in
thousands, except unit data)

December
31,

2009

2008

Assets

Cash and cash
equivalents

$
52

$
29

Receivables and
deposits

62

69

Other
assets

164

233

Investment property
(Notes C and E):

Land

125

125

Buildings and related
personal property

5,938

5,653

6,063

5,778

Less accumulated
depreciation

(4,210)

(3,885)

1,853

1,893

$
2,131

$
2,224

Liabilities and
Partners' Deficit

Liabilities

Accounts
payable

$
25

$
92

Tenant security
deposit liabilities

42

49

Other
liabilities

139

135

Due to affiliates
(Note B)

1,289

746

Mortgage notes payable
(Note C)

6,510

6,590

8,005

7,612

Partners'
Deficit

General
partner

(1,602)

(1,583)

Limited partners
(158,566 units issued and

outstanding)

(4,272)

(3,805)

(5,874)

(5,388)

$
2,131

$
2,224

See
Accompanying Notes to Consolidated Financial Statements

CONSOLIDATED CAPITAL
PROPERTIES III

CONSOLIDATED STATEMENTS OF
OPERATIONS

(in
thousands, except per unit data)

Years Ended December
31,

2009

2008

Revenues:

Rental
income

$
1,265

$
1,357

Other
income

146

148

Total
revenues

1,411

1,505

Expenses:

Operating

715

903

General and
administrative

175

229

Depreciation

329

284

Interest

609

485

Property
taxes

87

118

Total
expenses

1,915

2,019

Casualty gain (Note
F)

18

--

Net loss (Note D)

$
(486)

$
(514)

Net loss allocated to
general partner (4%)

$
(19)

$
(21)

Net loss allocated to
limited partners (96%)

(467)

(493)

$
(486)

$
(514)

Net loss per limited
partnership unit

$
(2.94)

$
(3.11)

See
Accompanying Notes to Consolidated Financial Statements

CONSOLIDATED CAPITAL
PROPERTIES III

CONSOLIDATED STATEMENTS OF
CHANGES IN PARTNERS' DEFICIT

(in
thousands, except unit data)

Limited

Partnership

General

Limited

Units

Partner

Partners

Total

Original capital
contributions

158,945

$
1

$79,473

$79,474

Partners deficit
at

December 31,
2007

158,572

$(1,562)

$(3,312)

$(4,874)

Net loss for the year
ended

December 31,
2008

--

(21)

(493)

(514)

Partners deficit
at

December 31,
2008

158,572

(1,583)

(3,805)

(5,388)

Abandoned units (Note
A)

(6)

--

--

--

Net loss for the year
ended

December 31,
2009

--

(19)

(467)

(486)

Partners deficit
at

December 31,
2009

158,566

$(1,602)

$(4,272)

$(5,874)

See
Accompanying Notes to Consolidated Financial Statements

CONSOLIDATED CAPITAL
PROPERTIES III

CONSOLIDATED STATEMENTS OF
CASH FLOWS

(in
thousands)

Years Ended December
31,

2009

2008

Cash flows from
operating activities:

Net loss

$
(486)

$
(514)

Adjustments to
reconcile net loss to net cash provided by

(used in) operating
activities:

Depreciation

329

284

Casualty
gain

(18)

--

Amortization of loan
costs

50

21

Change in
accounts:

Receivables and
deposits

7

(2)

Other
assets

19

(4)

Accounts
payable

(26)

21

Tenant security
deposit liabilities

(7)

2

Due to
affiliates

173

122

Other
liabilities

4

(35)

Net cash provided by
(used in) operating activities

45

(105)

Cash flows from
investing activities:

Property improvements
and replacements

(330)

(615)

Insurance proceeds
received

18

--

Net cash used in
investing activities

(312)

(615)

Cash flows from
financing activities:

Payments on mortgage
notes payable

(80)

(74)

Advances from
affiliate

370

624

Net cash provided by
financing activities

290

550

Net increase
(decrease) in cash and cash equivalents

23

(170)

Cash and cash
equivalents at beginning of year

29

199

Cash and cash
equivalents at end of year

$
52

$
29

Supplemental
disclosure of cash flow information:

Cash paid for
interest

$
462

$
441

Supplemental
disclosure of non-cash activity:

Property improvements
and replacements included in

accounts
payable

$
4

$
45

At December 31, 2007,
approximately $13,000 of property improvements and replacements were included in
accounts payable, and are included in property improvements and replacements for
the year ended December 31, 2008.

See
Accompanying Notes to Consolidated Financial Statements

CONSOLIDATED CAPITAL PROPERTIES III

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2009

Note A - Organization and Summary of
Significant Accounting Policies

Organization: Consolidated Capital
Properties III, a California limited partnership (the "Partnership" or
"Registrant") was formed on May 22, 1980, to acquire and operate commercial and
residential properties. The general partner responsible for management of
the Partnership's business is ConCap Equities, Inc. (the "General Partner" or
"CEI"). The General Partner is a subsidiary of Apartment Investment and
Management Company ("AIMCO"), a publicly traded real estate investment trust. As
of December 31, 2009, the Partnership owned one residential property in
Florida.

At the time of the
Partnership's formation, Consolidated Capital Equities Corporation ("CCEC"), a
Colorado corporation, was the corporate general partner and Consolidated Capital
Management Company ("CCMC"), a California general partnership, was the
non-corporate general partner. In 1988, through a series of transactions,
Southmark Corporation ("Southmark") acquired controlling interest in CCEC.
In December 1988, CCEC filed for reorganization under Chapter 11 of the United
States Bankruptcy Code. As part of CCEC's reorganization plan, CEI acquired
CCEC's general partner interests in the Partnership and in 15 other affiliated
public limited partnerships (the "Affiliated Partnerships") and CEI replaced
CCEC as managing general partner in all 16 partnerships. As part of the
solicitation for approval of CEI as general partner, the limited partners also
approved the conversion of CCMC from the general partner to a limited partner,
thereby leaving CEI as the sole general partner of the Partnership.

Going
Concern:
The Partnership Agreement provides that the Partnership is to terminate on
December 31, 2010 unless terminated prior to such date. Since the Partnerships
term will expire on December 31, 2010 and the term cannot be extended, the
General Partner began marketing its investment property, Village Green
Apartments, for sale in 2010. However, there can be no assurance that the
General Partner will be successful in its attempt to sell the property during
2010. The 2009 financial statements do not include any adjustments to reflect
the possible future effects on the recoverability and classification of assets
or the amounts and classification of liabilities that may result from the
outcome of this uncertainty.

Subsequent
Events: The
Partnerships management evaluated subsequent events through the time this
Annual Report on Form 10-K was filed.

Principles of
Consolidation: The Partnership's
consolidated financial statements include the accounts of ConCap Village Green
Associates, Ltd. The Partnership owns a 99% interest in this partnership,
and it has the ability to control the major operating and financial policies of
this partnership. All intercompany transactions have been
eliminated.

Recent Accounting
Pronouncement: In June 2009, the
Financial Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standards No. 168, The FASB Accounting Standards Codification and
the Hierarchy of Generally Accepted Accounting Principlesa replacement of FASB
Statement No. 162, or SFAS No. 168, which is effective for financial
statements issued for interim and annual periods ending after September 15,
2009. Upon the effective date of SFAS No. 168, the FASB Accounting
Standards Codification, or the FASB ASC, became the single source of
authoritative GAAP recognized by the FASB to be applied by nongovernmental
entities. Rules and interpretive releases of the Securities and Exchange
Commission, or SEC, under authority of federal securities laws are also sources
of authoritative GAAP for SEC registrants. The FASB ASC
superseded all then-existing non-SEC accounting and reporting standards, and all
other non-grandfathered non-SEC accounting literature not included in the FASB
ASC is now non-authoritative. Subsequent to the effective date of SFAS No.
168, the FASB will issue Accounting Standards Updates that serve to update the
FASB ASC.

Use of
Estimates:
The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the amounts reported in
the consolidated financial statements and accompanying notes. Actual results
could differ from those estimates.

Allocation of Profits,
Gains, and Losses: The Partnership Agreement
provides for net income and net losses for both financial and tax reporting
purposes to be allocated 96% to the Limited Partners and 4% to the general
partners.

Upon the sale or other
disposition, or refinancing, of any asset of the Partnership, the distributable
net proceeds shall be distributed as follows: First, to the partners in
proportion to their interests until the limited partners have received proceeds
equal to their original capital investment applicable to the property; Second,
to the limited partners until the limited partners have received distributions
from all sources equal to their 12% cumulative return; Third, concurrent with
limited partner distributions, 4% to the general partners subordinated and
deferred until the limited partners have received 100% of their capital
contributions; Thereafter, 86% to the limited partners in proportion to their
interests and 14% to the general partners.

Net loss per limited
partnership unit ("Unit") is computed by dividing net loss allocated to the
limited partners by the number of Units outstanding at the beginning of the
fiscal year. Per Unit information has been computed based on 158,572 Units
outstanding for both 2009 and 2008.

Abandoned
Units:
During the year ended December 31, 2009, the number of Units decreased by 6
Units due to limited partners abandoning their Units. In abandoning his or her
Units, a limited partner relinquishes all right, title and interest in the
Partnership as of the date of abandonment.

Investment
Property:
Investment property consists of one apartment complex and is stated at cost,
less accumulated depreciation, unless the carrying amount of the asset is not
recoverable. The Partnership capitalizes costs incurred in connection with
capital expenditure activities, including redevelopment and construction
projects, other tangible property improvements and replacements of existing
property components. Costs including interest, property taxes and
operating costs associated with redevelopment and construction projects are
capitalized during periods in which redevelopment and construction projects are
in progress. Costs incurred in connection with capital projects are capitalized
where the costs of the project exceed $250. Included in these capitalized
costs are payroll costs associated with time spent by site employees in
connection with the planning, execution and control of all capital expenditure
activities at the property level. The Partnership did not capitalize any costs
related to interest, property taxes or operating costs during the years ended
December 31, 2009 and 2008. Capitalized costs are depreciated over the useful
life of the asset. Expenditures for ordinary repairs, maintenance and
apartment turnover costs are expensed as incurred.

If events or circumstances
indicate that the carrying amount of the property may not be recoverable, the
Partnership will make an assessment of its recoverability by comparing the
carrying amount to the Partnerships estimate of the undiscounted future cash
flows, excluding interest charges, of the property. If the carrying
amount exceeds the estimated aggregate undiscounted future cash flows, the
Partnership would recognize an impairment loss to the extent the carrying amount
exceeds the estimated fair value of the property. No
adjustments for impairment of value were necessary for the years ending December
31, 2009 and 2008.

Depreciation: Depreciation is provided
by the straight-line method over the estimated lives of the investment property
and related personal property. For Federal income tax purposes, the
modified accelerated cost recovery method is used for depreciation of (1) real
property over 27½ years and (2) personal property additions over 5
years.

Cash and Cash
Equivalents: Includes cash on hand and
in banks. At certain times, the amount of cash deposited at a bank may
exceed the limit on insured deposits. Cash balances include approximately
$36,000 and zero at December 31, 2009 and 2008, respectively, that are
maintained by an affiliated management company on behalf of affiliated entities
in cash concentration accounts.

Fair Value of Financial
Instruments: FASB ASC Topic 825, Financial Instruments, requires
disclosure of fair value information about financial instruments, whether or not
recognized in the balance sheet, for which it is practicable to estimate fair
value. Fair value is defined as the amount at which the instruments could be
exchanged in a current transaction between willing parties, other than in a
forced or liquidation sale. The Partnership believes that the carrying amount of
its financial instruments (except for long-term debt) approximates their fair
value due to the short-term maturity of these instruments. The Partnership
estimates the fair value of its long-term debt by discounting future cash flows
using a discount rate commensurate with that currently believed to be available
to the Partnership for similar term, long-term debt. At December 31, 2009,
the fair value of the Partnership's long-term debt at the Partnership's
incremental borrowing rate was approximately $6,858,000.

Deferred
Costs: Loan
costs of approximately $289,000 at both December 31, 2009 and 2008, less
accumulated amortization of approximately $151,000 and $101,000, respectively,
are included in other assets. Prior to October 1, 2009, the loan costs were
amortized over the terms of the related loan agreements. As of October 1,
2009, the Partnership changed its estimate of the useful life of the loan costs
to better reflect the remaining useful life of these assets. The
Partnership term expires December 31, 2010, which is prior to the maturity of
the mortgage notes payable. The General Partner unsuccessfully pursued
extending the Partnership term. Therefore, the Partnership determined that the
loan costs should be amortized over the remaining life of the Partnership. Prior
to the change in estimate, the loan costs would have been fully amortized in
2021, the date the mortgage notes payable mature. The effect of this
change was to increase 2009 amortization expense by approximately $29,000,
increase 2009 net loss by approximately $29,000 and increase net loss per
limited partnership unit by $0.17. Amortization expense was approximately
$50,000 and $21,000 for the years ended December 31, 2009 and 2008,
respectively, and is included in interest expense. Amortization expense is
expected to be approximately $138,000 for 2010.

Leasing commissions and
other direct costs incurred in connection with successful leasing efforts are
deferred and amortized over the terms of the related leases. Amortization
of these costs is included in operating expenses.

Tenant Security
Deposits:
The Partnership requires security deposits from lessees for the duration of the
lease and such deposits are included in receivables and deposits. Deposits
are refunded when the tenant vacates, provided the tenant has not damaged the
space and is current on rental payments.

Leases: The Partnership generally
leases apartment units for twelve-month terms or less. The Partnership
will offer rental concessions during particularly slow months or in response to
heavy competition from other similar complexes in the area. Rental income
attributable to leases, net of any concessions, is recognized on a straight-line basis over the term of the lease.
The Partnership evaluates all accounts receivable from residents and establishes
an allowance, after the application of security deposits, for accounts greater
than 30 days past due on current tenants and all receivables due from former
tenants.

Segment
Reporting:
FASB ASC Topic 280-10, Segment Reporting, established standards for the way
that public business enterprises report information about operating segments in
annual financial statements and requires that those enterprises report selected
information about operating segments in interim financial reports. FASB ASC
Topic 280-10, Segment Reporting, also established standards for related
disclosures about products and services, geographic areas, and major customers.
As defined in FASB ASC Topic 280-10, the Partnership has only one reportable
segment.

Advertising: The Partnership expenses
the costs of advertising as incurred. Advertising costs of approximately $38,000
and $51,000 for the years ended December 31, 2009 and 2008, respectively, were
charged to operating expense.

Note B - Transactions with
Affiliated Parties

The Partnership has no employees and depends
on the General Partner and its affiliates for the management and administration
of all Partnership activities. The Partnership Agreement provides for payments
to affiliates for services and reimbursement of certain expenses incurred by
affiliates of the General Partner on behalf of the Partnership.

Affiliates of the General Partner receive 5%
of gross receipts from the Partnerships property as compensation for providing
property management services. The Partnership paid to such affiliates
approximately $69,000 and $75,000 for the years ended December 31, 2009 and
2008, respectively, which are included in operating expenses.

Affiliates of the General Partner charged the
Partnership for reimbursement of accountable administrative expenses amounting
to approximately $94,000 and $206,000 for the years ended December 31, 2009 and
2008, respectively. These amounts are included in general and administrative
expenses and investment property. The portion of these reimbursements
included in investment property for the years ended December 31, 2009 and 2008
are construction management services provided by an affiliate of the General
Partner of approximately $27,000 and $74,000, respectively. At December 31, 2009
and 2008, approximately $174,000 and $100,000, respectively, of such
reimbursements were owed to affiliates of the General Partner and are included
in due to affiliates.

The Partnership Agreement
provides for a special management fee equal to 9% of the total distributions
made to the limited partners from cash flow from operations to be paid to the
General Partner for executive and administrative management services.
During the years ended December 31, 2009 and 2008, no special management fees
were paid as no distributions from cash flow from operations were
made.

Pursuant to the Partnership
Agreement, the General Partner is entitled to receive a commission equal to 3%
of the aggregate disposition price of sold properties. The Partnership paid a
commission of $108,000 to the General Partner related to the sale of
Professional Plaza in 1999. This amount is subordinate to the limited
partners receiving their original capital contributions plus a cumulative
preferred return of 6% per annum of their adjusted capital investment, as
defined in the Partnership Agreement. If the limited partners have not received
these returns when the Partnership terminates, the General Partner will be
required to return this amount to the Partnership.

During the years
ended December 31, 2009 and 2008, AIMCO Properties, L.P., an affiliate of the
General Partner, advanced the Partnership approximately $370,000 and $624,000,
respectively, to fund operations, property taxes and capital expenditures at
Village Green Apartments. AIMCO Properties, L.P. charges interest on
advances under the terms permitted by the Partnership Agreement. The outstanding
advances made to the Partnership accrue interest at a variable rate based on the
prime rate plus a market rate adjustment for similar type loans. Affiliates of
the General Partner review the market rate adjustment quarterly. The interest
rates on outstanding advances at December 31, 2009 ranged from 5.77% to 12.81%.
Interest expense on advances was approximately $99,000 and $22,000 for the years
ended December 31, 2009 and 2008, respectively. At December 31, 2009 and 2008,
the total amount of outstanding advances and associated accrued interest owed to
AIMCO Properties, L.P. was approximately $1,115,000 and $646,000, respectively,
and is included in due to affiliates. Subsequent to December 31, 2009, the
General Partner advanced the Partnership approximately $45,000 to fund
operations at Village Green Apartments. The Partnership may receive additional
advances of funds from AIMCO Properties, L.P. although AIMCO Properties, L.P. is
not obligated to provide such advances. For more information on AIMCO
Properties, L.P., including copies of its audited balance sheet, please see its
reports filed with the Securities and Exchange Commission.

The Partnership insures its
property up to certain limits through coverage provided by AIMCO which is
generally self-insured for a portion of losses and liabilities related to
workers compensation, property casualty, general liability and vehicle
liability. The Partnership insures its property above the AIMCO limits through
insurance policies obtained by AIMCO from insurers unaffiliated with the General
Partner. During the years ended December 31, 2009 and 2008, the Partnership was
charged by AIMCO and its affiliates approximately $31,000 and $43,000,
respectively, for insurance coverage and fees associated with policy claims
administration.

In addition to its indirect ownership of the
general partner interests in the Partnership, AIMCO and its affiliates owned
88,477.50 Units in the Partnership representing 55.80% of the outstanding Units
at December 31, 2009. A number of these Units were acquired pursuant to tender
offers made by AIMCO or its affiliates. It is possible that AIMCO or its
affiliates will acquire additional Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private purchases or tender offers. Pursuant to the Partnership
Agreement, unitholders holding a majority of the Units are entitled to take
action with respect to a variety of matters that include, but are not limited
to, voting on certain amendments to the Partnership Agreement and voting to
remove the General Partner. As a result of its ownership of 55.80% of the
outstanding Units, AIMCO and its affiliates are in a position to control all
voting decisions with respect to the Partnership. Although the General Partner
owes fiduciary duties to the limited partners of the Partnership, the General
Partner also owes fiduciary duties to AIMCO as its sole stockholder. As a
result, the duties of the General Partner, as general partner, to the
Partnership and its limited partners may come into conflict with the duties of
the General Partner to AIMCO as its sole stockholder.

Note C - Mortgage Notes
Payable

The terms of mortgage notes
payable are as follows:

Principal

Monthly

Principal

Balance
At

Payment

Stated

Balance

December
31,

Including

Interest

Maturity

Due
At

Property

2009

2008

Interest

Rate

Date(1)

Maturity

(in
thousands)

(in
thousands)

Village Green

Apartments

1st
mortgage

$2,918

$2,948

$
21

7.54%

08/21

$2,343

2nd
mortgage

3,592

3,642

22

5.93%

08/19

2,934

$6,510

$6,590

$
43

$5,277

(1) Maturity
dates of the mortgage notes payable extend beyond the termination date of the
Partnership which is December 31, 2010.

The fixed rate mortgage notes payable are
nonrecourse and are secured by pledge of the Partnerships property and by
pledge of revenues from the rental property. Also, the loans require prepayment
penalties if repaid prior to maturity and prohibit resale of the property
subject to existing indebtedness.

While the Partnership
termination date is December 31, 2010, scheduled principal payments of the
mortgage notes payable subsequent to December 31, 2009 are as follows (in
thousands):

2010

$
85

2011

91

2012

97

2013

103

2014

110

Thereafter

6,024

$6,510

Note D - Income
Taxes

The Partnership is
classified as a partnership for Federal income tax purposes. Accordingly,
no provision for income taxes is made in the consolidated financial statements
of the Partnership. Taxable income or loss of the Partnership is reported
in the income tax returns of its partners.

The following is a
reconciliation of reported net loss and Federal taxable loss (in thousands,
except per unit data):

2009

2008

Net loss as
reported

$ (486)

$ (514)

Add
(deduct):

Deferred revenue and
other liabilities

(5)

5

Depreciation
differences

83

(213)

Other

28

(52)

Federal taxable
loss

$
(380)

$
(774)

Federal taxable loss
per

limited
partnership unit (1)

$
.76

$
(4.17)

(1) For 2009 and
2008, allocations under the Internal Revenue Code Section 704(b) result in the
limited partners being allocated a non-pro rata amount of taxable income or
loss.

The following is a
reconciliation between the Partnership's reported amounts and Federal tax basis
of net assets and liabilities at December 31, 2009 and 2008 (in
thousands):

2009

2008

Net liabilities as
reported

$(5,874)

$(5,388)

Differences in basis
of assets and liabilities

Investment property at
cost

(2,263)

2,378

Accumulated
depreciation

4,001

(727)

Other assets and
liabilities

136

116

Syndication
costs

8,692

8,692

Net assets  Federal
tax basis

$ 4,692

$
5,071

Note E  Investment Property
and Accumulated Depreciation

Initial
Cost

To
Partnership

(in
thousands)

Buildings

Net
Cost

and
Related

Capitalized

Personal

Subsequent
to

Description

Encumbrances

Land

Property

Acquisition

(in
thousands)

(in
thousands)

Village
Green Apartments

$
6,510

$ 125

$
2,375

$
3,563

Gross
Amount At Which Carried

At
December 31, 2009

(in
thousands)

Buildings

And
Related

Personal

Accumulated

Date

Depreciable

Description

Land

Property

Total

Depreciation

Acquired

Life

(in
thousands)

Village
Green Apartments

$ 125

$
5,938

$
6,063

$
4,210

12/20/91

3-30
yrs

Reconciliation of
"investment property and accumulated depreciation":

Years Ended December
31,

2009

2008

(in
thousands)

Investment
Property

Balance at beginning
of year

$
5,778

$
5,195

Property
improvements

289

647

Disposal of
property

(4)

(64)

Balance at end of
year

$
6,063

$
5,778

Accumulated
Depreciation

Balance at beginning
of year

$
3,885

$
3,665

Additions charged to
expense

329

284

Disposal of
property

(4)

(64)

Balance at end of
year

$
4,210

$
3,885

The aggregate cost of the
real estate for Federal income tax purposes at December 31, 2009 and 2008 is
approximately $3,800,000 and $8,156,000, respectively. The accumulated
depreciation taken for Federal income tax purposes at December 31, 2009 and 2008
is approximately $209,000 and $4,612,000, respectively.

Note F 
Casualty Event

In July 2008, Village Green
Apartments sustained damages of approximately $22,000 to a concrete wall. No
apartment units were damaged. During the year ended December 31, 2009, the
Partnership recognized a casualty gain of approximately $12,000 as a result of
the receipt of insurance proceeds of approximately $12,000. The damaged assets
were fully depreciated.

In August 2008, Village Green Apartments
sustained damages from Tropical Storm Fay of approximately $109,000, including
estimated clean up costs of approximately $30,000, which were included in
operating expenses during the year ended December 31, 2008. These costs were not
covered by insurance proceeds. The Partnership did not recognize a loss as the
damaged assets were fully depreciated.

During May 2009, Village
Green Apartments sustained damages of approximately $29,000 from a storm. No
apartment units were damaged. During the year ended December 31, 2009, the
Partnership recognized a casualty gain of approximately $6,000 as a result of
the receipt of insurance proceeds of approximately $6,000. The damaged
assets were fully depreciated.

Note G -
Contingencies

As previously disclosed,
AIMCO Properties, L.P. and NHP Management Company, both affiliates of the
General Partner, were defendants in a lawsuit, filed as a collective action in
August 2003 in the United States District Court for the District of Columbia,
alleging that they willfully violated the Fair Labor Standards Act (FLSA) by
failing to pay maintenance workers overtime for time worked in excess of 40
hours per week (overtime claims). The plaintiffs also contended that
AIMCO Properties, L.P. and NHP Management Company (the Defendants) failed to
compensate maintenance workers for time that they were required to be "on-call"
(on-call claims). In March 2007, the court in the District of Columbia
decertified the collective action. In July 2007, plaintiffs counsel filed
individual cases in Federal court in 22 jurisdictions. In the second
quarter of 2008, AIMCO Properties, L.P. settled the overtime cases involving 652
plaintiffs and established a framework for resolving the 88 remaining on-call
claims and the attorneys fees claimed by plaintiffs counsel. As a
result, the lawsuits asserted in the 22 Federal courts have been dismissed.
During the fourth quarter of 2008, the settlement amounts for alleged
unpaid overtime to employees were paid by those partnerships where the
respective employees had worked. The Partnership was not required to pay
any settlement amounts. At this time, the 88 remaining on-call claims
and the attorneys fees claimed by plaintiffs counsel are not resolved. The
parties have selected six on-call claims that will proceed forward through the
arbitration process and have selected arbitrators. After those arbitrations have
been completed, the parties will revisit settling the on-call claims. The first
two arbitrations took place in December 2009 and the Defendants received a
defense verdict against the first two claimants and plaintiffs dismissed the
claims of the next two claimants. The remaining two arbitrations will take place
in April 2010. The General Partner is uncertain as to the amount of any loss
that may be allocable to the Partnership. Therefore, the Partnership cannot
estimate whether any loss will occur or a potential range of loss.

The
Partnership is unaware of any other pending or outstanding litigation matters
involving it or its investment property that are not of a routine nature arising
in the ordinary course of business.

Environmental

Various Federal, state and local laws subject property owners or
operators to liability for management, and the costs of removal or remediation,
of certain hazardous substances present on a property, including lead-based
paint. Such laws often impose liability without regard to whether the owner or
operator knew of, or was responsible for, the release or presence of the
hazardous substances. The presence of, or the failure to manage or remedy
properly, hazardous substances may adversely affect occupancy at affected
apartment communities and the ability to sell or finance affected properties. In
addition to the costs associated with investigation and remediation actions
brought by government agencies, and potential fines or penalties imposed by such
agencies in connection therewith, the presence of hazardous substances on a
property could result in claims by private plaintiffs for personal injury,
disease, disability or other infirmities. Various laws also impose liability for
the cost of removal, remediation or disposal of hazardous substances through a
licensed disposal or treatment facility. Anyone who arranges for the disposal or
treatment of hazardous substances is potentially liable under such laws. These
laws often impose liability whether or not the person arranging for the disposal
ever owned or operated the disposal facility. In connection with the ownership,
operation and management of its property, the Partnership could potentially be
liable for environmental liabilities or costs associated with its
property.

Mold

The Partnership is aware of lawsuits against
owners and managers of multifamily properties asserting claims of personal
injury and property damage caused by the presence of mold, some of which have
resulted in substantial monetary judgments or settlements. The Partnership
has only limited insurance coverage for property damage loss claims arising from
the presence of mold and for personal injury claims related to mold
exposure. Affiliates of the General Partner have implemented policies,
procedures, third-party audits and training and the General Partner believes
that these measures will prevent or eliminate mold exposure and will minimize
the effects that mold may have on residents. To date, the Partnership has
not incurred any material costs or liabilities relating to claims of mold
exposure or to abate mold conditions. Because the law regarding mold is
unsettled and subject to change the General Partner can make no assurance that
liabilities resulting from the presence of or exposure to mold will not have a
material adverse effect on the Partnerships consolidated financial condition or
results of operations.

ITEM
9. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure.

None.

Item 9A(T). Controls and
Procedures.

(a) Disclosure
Controls and Procedures

The Partnerships
management, with the participation of the principal executive officer and
principal financial officer of the General Partner, who are the equivalent of
the Partnerships principal executive officer and principal financial officer,
respectively, has evaluated the effectiveness of the Partnerships disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end
of the period covered by this report. Based on such evaluation, the principal
executive officer and principal financial officer of the General Partner, who
are the equivalent of the Partnerships principal executive officer and
principal financial officer, respectively, have concluded that, as of the end of
such period, the Partnerships disclosure controls and procedures are
effective.

Managements Report on
Internal Control Over Financial Reporting

The Partnerships management
is responsible for establishing and maintaining adequate internal control over
financial reporting. Internal control over financial reporting is defined in
Rule 13a-15(f) and 15d-15(f) under the Exchange Act as a process designed by, or
under the supervision of, the principal executive and principal financial
officers of the General Partner, who are the equivalent of the Partnerships
principal executive officer and principal financial officer, respectively, and
effected by the Partnerships management and other personnel to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of consolidated financial statements for external purposes in
accordance with generally accepted accounting principles and includes those
policies and procedures that:

·pertain
to the maintenance of records that in reasonable detail accurately and fairly
reflect the transactions and dispositions of assets;

·provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of consolidated financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures are being
made only in accordance with authorizations of the Partnerships management;
and

·provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of assets that could have a material effect on
the consolidated financial statements.

Because of its inherent
limitations, internal control over financial reporting may not prevent or detect
misstatements. Projections of any evaluation of effectiveness to future periods
are subject to the risks that controls may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.

The Partnerships management
assessed the effectiveness of the Partnerships internal control over financial
reporting as of December 31, 2009. In making this assessment, the
Partnerships management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control-Integrated Framework.

Based on their assessment,
the Partnerships management concluded that, as of December 31, 2009, the
Partnerships internal control over financial reporting is effective.

This annual report does not
include an attestation report of the Partnerships registered public accounting
firm regarding internal control over financial reporting. Managements report
was not subject to the attestation by the Partnerships registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit the Partnership to provide only managements report in
this annual report.

(b) Changes in
Internal Control Over Financial Reporting.

There has been no change in
the Partnerships internal control over financial reporting (as defined in Rules
13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter of
2009 that has materially affected, or is reasonably likely to materially affect,
the Partnerships internal control over financial reporting.

Item 9B.
Other Information.

None.

PART III

Item 10.
Directors, Executive Officers, and Corporate Governance.

The Registrant has no
directors or officers. The general partner of the Registrant is ConCap
Equities, Inc. (the General Partner). The names and ages of, as well as the
positions and offices held by, the present directors and officers of the General
Partner are set forth below. There are no family relationships between or among
any officers or directors.

Name

Age

Position

Steven D.
Cordes

38

Director and Senior
Vice President

John
Bezzant

47

Director and Senior
Vice President

Timothy J.
Beaudin

51

President and Chief
Operating Officer

Ernest M.
Freedman

39

Executive Vice
President and Chief Financial Officer

Lisa R.
Cohn

41

Executive Vice
President, General Counsel and Secretary

Paul
Beldin

36

Senior Vice President
and Chief Accounting Officer

Stephen B.
Waters

48

Senior Director of
Partnership Accounting

Steven D. Cordes was appointed as a Director
of the General Partner effective March 2, 2009. Mr. Cordes has been a
Senior Vice President of the General Partner and AIMCO since May 2007. Mr.
Cordes joined AIMCO in 2001 as a Vice President of Capital Markets with
responsibility for AIMCOs joint ventures and equity capital markets
activity. Prior to joining AIMCO, Mr. Cordes was a manager in the
financial consulting practice of PricewaterhouseCoopers. Effective March
2009, Mr. Cordes was appointed to serve as the equivalent of the chief executive
officer of the Partnership. Mr. Cordes brings particular expertise to the
Board in the areas of asset management as well as finance and
accounting.

John Bezzant was appointed
as a Director of the General Partner effective December 16, 2009. Mr.
Bezzant has been a Senior Vice President of the General Partner and AIMCO since
joining AIMCO in June 2006. Prior to joining AIMCO, from 2005 to
June 2006, Mr. Bezzant was a First Vice President at Prologis, a Denver,
Colorado-based real estate investment trust, and from 1986 to 2005, Mr. Bezzant
served as Vice President, Asset Management at Catellus Development Corporation,
a San Francisco, California-based real estate investment trust. Mr.
Bezzant brings particular expertise to the Board in the areas of real estate
finance, property operations, sales and development.

Timothy J. Beaudin was
appointed President and Chief Operating Officer of AIMCO and the General Partner
in February 2009. He joined AIMCO and the General Partner as Executive
Vice President and Chief Development Officer in October 2005 and was appointed
Executive Vice President and Chief Property Operating Officer of the General
Partner and AIMCO in October 2008. Mr. Beaudin oversees conventional and
affordable property operations, transactions, asset management, and
redevelopment and construction services for AIMCO and the General Partner.
Prior to joining AIMCO and beginning in 1995, Mr. Beaudin was with Catellus
Development Corporation. During his last five years at Catellus, Mr.
Beaudin served as Executive Vice President, with management responsibility for
development, construction and asset management.

Ernest M. Freedman was
appointed Executive Vice President and Chief Financial Officer of the General
Partner and AIMCO in November 2009. Mr. Freedman joined AIMCO in
2007 as Senior Vice President of Financial Planning and Analysis and has served
as Senior Vice President of Finance since February 2009, responsible for financial planning, tax, accounting and related areas.
Prior to joining AIMCO, from 2004 to 2007, Mr. Freedman served as chief
financial officer of HEI Hotels and Resorts.

Lisa R. Cohn was appointed
Executive Vice President, General Counsel and Secretary of the General Partner
and AIMCO in December 2007. From January 2004 to December 2007, Ms. Cohn
served as Senior Vice President and Assistant General Counsel of AIMCO.
Ms. Cohn joined AIMCO in July 2002 as Vice President and Assistant General
Counsel. Prior to joining AIMCO, Ms. Cohn was in private practice with the
law firm of Hogan and Hartson LLP.

Paul Beldin joined AIMCO in
May 2008 and has served as Senior Vice President and Chief Accounting Officer of
AIMCO and the General Partner since that time. Prior to joining AIMCO, Mr.
Beldin served as controller and then as chief financial officer of America First
Apartment Investors, Inc., a publicly traded multifamily real estate investment
trust, from May 2005 to September 2007 when the company was acquired by Sentinel
Real Estate Corporation. Prior to joining America First Apartment
Investors, Inc., Mr. Beldin was a senior manager at Deloitte and Touche LLP,
where he was employed from August 1996 to May 2005, including two years as an
audit manager in SEC services at Deloittes national office.

Stephen B. Waters was
appointed Senior Director of Partnership Accounting of AIMCO and the General
Partner in June 2009. Mr. Waters has responsibility for partnership
accounting with AIMCO and serves as the principal financial officer of the
General Partner. Mr. Waters joined AIMCO as a Director of Real Estate
Accounting in September 1999 and was appointed Vice President of the General
Partner and AIMCO in April 2004. Prior to joining AIMCO, Mr. Waters was a
senior manager at Ernst & Young LLP.

The Registrant is not aware
of the involvement in any legal proceedings with respect to the directors and
executive officers listed in this Item 10.

One or more of the above
persons are also directors and/or officers of a general partner (or general
partner of a general partner) of limited partnerships which either have a class
of securities registered pursuant to Section 12(g) of the Securities Exchange
Act of 1934, or are subject to the reporting requirements of Section 15(d) of
such Act. Further, one or more of the above persons are also officers of
Apartment Investment and Management Company and the general partner of AIMCO
Properties, L.P., entities that have a class of securities registered pursuant
to Section 12(g) of the Securities Exchange Act of 1934, or are subject to the
reporting requirements of Section 15 (d) of such Act.

The board of directors of the General Partner
does not have a separate audit committee. As such, the board of directors of the
General Partner fulfills the functions of an audit committee. The board of
directors has determined that Steven D. Cordes meets the requirement of an
"audit committee financial expert".

The directors and officers
of the General Partner with authority over the Partnership are all employees of
subsidiaries of AIMCO. AIMCO has adopted a code of ethics that applies to such
directors and officers that is posted on AIMCO's website (www.AIMCO.com).
AIMCO's website is not incorporated by reference to this filing.

Item 11.
Executive Compensation.

Neither the directors nor
the officers of the General Partner received any remuneration from the
Registrant.

Except as noted below, no
person or entity was known by the Registrant to be the beneficial owner of more
than 5% of the Limited Partnership Units (the Units) of the Registrant as of
December 31, 2009.

The Partnership has no employees and depends
on the General Partner and its affiliates for the management and administration
of all Partnership activities. The Partnership Agreement provides for payments
to affiliates for services and reimbursement of certain expenses incurred by
affiliates of the General Partner on behalf of the Partnership.

Affiliates of the General Partner receive 5%
of gross receipts from the Partnerships property as compensation for providing
property management services. The Partnership paid to such affiliates
approximately $69,000 and $75,000 for the years ended December 31, 2009 and
2008, respectively, which are included in operating expenses on the consolidated
statements of operations included in Item 8. Financial Statements and
Supplementary Data.

Affiliates of the General Partner charged the
Partnership for reimbursement of accountable administrative expenses amounting
to approximately $94,000 and $206,000 for the years ended December 31, 2009 and
2008, respectively. These amounts are included in general and administrative
expenses and investment property on the consolidated financial statements
included in Item 8. Financial Statements and Supplementary Data. The
portion of these reimbursements included in investment property for the years
ended December 31, 2009 and 2008 are construction management services provided
by an affiliate of the General Partner of approximately $27,000 and $74,000,
respectively. At December 31, 2009 and 2008, approximately $174,000 and
$100,000, respectively, of such reimbursements were owed to affiliates of the
General Partner and are included in due to affiliates on the consolidated balance sheets included
in Item 8. Financial Statements and Supplementary Data.

The Partnership Agreement
provides for a special management fee equal to 9% of the total distributions
made to the limited partners from cash flow from operations to be paid to the
General Partner for executive and administrative management services.
During the years ended December 31, 2009 and 2008, no special management fees
were paid as no distributions from cash flow from operations were
made.

Pursuant to the Partnership Agreement, the
General Partner is entitled to receive a commission equal to 3% of the aggregate
disposition price of sold properties. The Partnership paid a commission of
$108,000 to the General Partner related to the sale of
Professional Plaza in 1999. This amount is subordinate to the limited
partners receiving their original capital contributions plus a cumulative
preferred return of 6% per annum of their adjusted capital investment, as
defined in the Partnership Agreement. If the limited partners have not received
these returns when the Partnership terminates, the General Partner will be
required to return this amount to the Partnership.

During the years ended
December 31, 2009 and 2008, AIMCO Properties, L.P., an affiliate of the General
Partner, advanced the Partnership approximately $370,000 and $624,000,
respectively, to fund operations, property taxes and capital expenditures at
Village Green Apartments. AIMCO Properties, L.P. charges interest on
advances under the terms permitted by the Partnership Agreement. The outstanding
advances made to the Partnership accrue interest at a variable rate based on the
prime rate plus a market rate adjustment for similar type loans. Affiliates of
the General Partner review the market rate adjustment quarterly. The interest
rates on outstanding advances at December 31, 2009 ranged from 5.77% to 12.81%.
Interest expense on advances was approximately $99,000 and $22,000 for the years
ended December 31, 2009 and 2008, respectively. At December 31, 2009 and 2008,
the total amount of outstanding advances and associated accrued interest owed to
AIMCO Properties, L.P. was approximately $1,115,000 and $646,000, respectively,
and is included in due to affiliates on the consolidated balance
sheets included in Item 8. Financial Statements and Supplementary Data.
Subsequent to December 31, 2009, the General Partner advanced the Partnership
approximately $45,000 to fund operations at Village Green Apartments. The
Partnership may receive additional advances of funds from AIMCO Properties, L.P.
although AIMCO Properties, L.P. is not obligated to provide such advances. For
more information on AIMCO Properties, L.P., including copies of its audited
balance sheet, please see its reports filed with the Securities and Exchange
Commission.

The Partnership insures its
property up to certain limits through coverage provided by AIMCO which is
generally self-insured for a portion of losses and liabilities related to
workers compensation, property casualty, general liability and vehicle
liability. The Partnership insures its property above the AIMCO limits through
insurance policies obtained by AIMCO from insurers unaffiliated with the General
Partner. During the years ended December 31, 2009 and 2008, the Partnership was
charged by AIMCO and its affiliates approximately $31,000 and $43,000,
respectively, for insurance coverage and fees associated with policy claims
administration.

In addition to its indirect ownership of the
general partner interests in the Partnership, AIMCO and its affiliates owned
88,477.50 Units in the Partnership representing 55.80% of the outstanding Units
at December 31, 2009. A number of these Units were acquired pursuant to tender
offers made by AIMCO or its affiliates. It is possible that AIMCO or its
affiliates will acquire additional Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private purchases or tender offers. Pursuant to the Partnership
Agreement, unitholders holding a majority of the Units are entitled to take
action with respect to a variety of matters that include, but are not limited
to, voting on certain amendments to the Partnership Agreement and voting to
remove the General Partner. As a result of its ownership of 55.80% of the
outstanding Units, AIMCO and its affiliates are in a position to control all
voting decisions with respect to the Partnership. Although the General Partner
owes fiduciary duties to the limited partners of the Partnership, the General
Partner also owes fiduciary duties to AIMCO as its sole stockholder. As a
result, the duties of the General Partner, as general partner, to the
Partnership and its limited partners may come into conflict with the duties of
the General Partner to AIMCO as its sole stockholder.

Neither of the General
Partners directors is independent under the independence standards established
for New York Stock Exchange listed companies as both directors are employed by
the parent of the General Partner.

Item 14.Principal Accounting Fees and Services.

The General Partner has
reappointed Ernst & Young LLP as independent auditors to audit the
consolidated financial statements of the Partnership for 2010. The aggregate
fees billed for services rendered by Ernst & Young LLP during the years
ended December 31, 2009 and 2008 are described below.

Audit Fees. Fees for audit services
totaled approximately $38,000 and $41,000 for 2009 and 2008, respectively. Fees
for audit services also include fees for the reviews of the Partnerships
Quarterly Reports on Form 10-Q.

Tax Fees. Fees for tax services
totaled approximately $9,000 for both 2009 and 2008.

PART IV

Item 15.
Exhibits, Financial Statement Schedules.

(a) Report of
Independent Registered Public Accounting Firm

Consolidated Balance Sheets - December 31, 2009 and 2008

Consolidated
Statements of Operations - Years ended December 31, 2009 and 2008

Consolidated Statements of
Changes in Partners' Deficit - Years ended December 31, 2009 and 2008

Consolidated
Statements of Cash Flows - Years ended December 31, 2009 and 2008

Notes to Consolidated Financial Statements

Schedules are omitted for
the reason that they are inapplicable or equivalent information has been
included elsewhere herein.

b) Exhibits:

See Exhibit index

The agreements
included as exhibits to this Form 10-K contain representations and warranties by
each of the parties to the applicable agreement. These representations and
warranties have been made solely for the benefit of the other parties to the
applicable agreement and:

should not in all
instances be treated as categorical statements of fact, but rather as a way of
allocating the risk to one of the parties if those statements prove to be
inaccurate;

have been qualified by
disclosures that were made to the other party in connection with the
negotiation of the applicable agreement, which disclosures are not necessarily
reflected in the agreement;

may apply standards of
materiality in a way that is different from what may be viewed as material to
an investor; and

were made only as of the
date of the applicable agreement or such other date or dates as may be
specified in the agreement and are subject to more recent developments.

Accordingly,
these representations and warranties may not describe the actual state of
affairs as of the date they were made or at any other time. The Partnership
acknowledges that, notwithstanding the inclusion of the foregoing cautionary
statements, it is responsible for considering whether additional specific
disclosures of material information regarding material contractual provisions
are required to make the statements in this Form 10-K not misleading. Additional
information about the Partnership may be found elsewhere in this Form 10-K
and the Partnerships other public filings, which are available without
charge through the SECs website at http://www.sec.gov.

SIGNATURES

Pursuant to the requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

CONSOLIDATED CAPITAL PROPERTIES
III

By: CONCAP
EQUITIES, INC.

General Partner

By:
/s/Steven D. Cordes

Steven D. Cordes

Senior Vice President

By:
/s/Stephen B. Waters

Stephen B. Waters

Senior Director of Partnership Accounting

Date: April 9,
2010

Pursuant to the requirements
of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

/s/John
Bezzant

Director and
Senior

Date: April 9,
2010

John
Bezzant

Vice
President

/s/Steven D.
Cordes

Director and Senior

Date: April 9,
2010

Steven D.
Cordes

Vice
President

/s/Stephen B.
Waters

Senior Director of
Partnership

Date: April 9,
2010

Stephen B.
Waters

Accounting

CONSOLIDATED CAPITAL
PARTNERS III

EXHIBIT INDEX

Exhibit
NumberDescription
of Exhibit

3.1
Certificate of Limited Partnership, as amended to date (Exhibit 3 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December 31,
1991, is incorporated herein by reference).

3.2
Partnership Agreement dated May 22, 1980 is incorporated by reference to Exhibit
A to the Prospectus of the Registration dated August 17, 1981 as filed with the
Commission pursuant to Rule 424(b) under the Act.

10.55
Multifamily Note, dated August 31, 2007 between Concap Village Green Associates,
Ltd., a Texas limited partnership, and Capmark Bank, a Utah industrial bank,
incorporated by reference to the Registrants Current Report on Form 8-K dated
August 31, 2007.

10.56
Amended and Restated Multifamily Note, dated August 31, 2007 between Concap
Village Green Associates, Ltd., a Texas limited partnership, and Federal Home
Loan Mortgage Corporation, incorporated by reference to the Registrants Current
Report on Form 8-K dated August 31, 2007.

32.1
Certification of the equivalent of the Chief Executive Officer and Chief
Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.

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